Dist.Ct. did not err in dismissing for failure to state cause of action, cross-plaintiffs' RICO action, alleging that cross-defendants-two law firms, which performed real-estate-related services on behalf of bank, committed financial institution fraud under 18 USC section 1962(c) and collected on unlawful debt. To state cause of action under section 1962(c), cross-plaintiffs were required to allege that instant law firms engaged in conduct of an enterprise through pattern of racketeering activity or collection of unlawful debt, and instant action failed to state viable action under section 1962(c) where allegations regarding law firms’ mere provision of legal services to alleged racketeering enterprise did not meet operation or management element of said offense. In this regard, cross-complaint alleged that seller of hotel properties colluded with bank and others to inflate appraised values of hotels that caused purchaser of hotels to eventually default on loans generated by said bank. However, cross-complaint failed to adequately plead that law firms either played role in operating or managing bank, or conspired to commit RICO violation or invested income from pattern of racketeering. Furthermore, even if law firms knew or should have known that instant appraisals were inflated, alleging such knowledge, by itself, was insufficient to state RICO claim against law firms.
